Sensex Drops Nearly 700 Points; Trade Uncertainty Hits Sentiment

The Indian equity market began the week on a negative note, with both the Sensex and Nifty opening sharply lower on Monday, June 2.

The weak opening followed unfavourable global cues and investor caution surrounding ongoing trade uncertainties.

At around 9:18 AM, the BSE Sensex was down 676.86 points or 0.83 per cent, trading at 80,774.15, while the NSE Nifty dropped 181.15 points or 0.74 per cent to 24,568.25.

Broader market indices also reflected selling pressure.

The Nifty Midcap 100 index slipped 104 points or 0.18 per cent to 57,315, while the Nifty Smallcap 100 index was down 69 points or 0.39 per cent at 17,813.

Sectorally, IT, financial services, metal, media, commodities, and services witnessed significant losses, whereas FMCG, PSU banks, realty, and energy sectors managed to stay in the green.

Among the top Sensex gainers were HUL, Adani Ports, IndusInd Bank, Nestle, SBI, Eternal (Zomato), Asian Paints, and Power Grid. Conversely, HDFC Bank, HCL Tech, Reliance Industries, Bajaj Finance, Infosys, Tata Steel, and Tech Mahindra were among the major laggards.

Analysts See Ongoing Consolidation

According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market structure continues to favour a short-term consolidation phase, even as the primary trend remains bullish.

He pointed to former US President Donald Trump’s 50 per cent tariffs on steel and aluminium as a sign of persisting trade uncertainties, which could weigh on global market sentiment.

“The tariff and trade scenario will continue to be uncertain and turbulent,” he remarked.

On the domestic front, analysts are optimistic. India’s Q4 GDP growth at 7.4 per cent has exceeded expectations, and trends in consumption and capital expenditure remain positive.

Combined with low inflation and an anticipated continuation of a rate-cutting policy, the outlook for FY26 economic growth remains robust.

Most Asian markets were trading lower, with Tokyo, Hong Kong, Jakarta, and Seoul posting losses.

The Shanghai market was closed due to a public holiday.

On Wall Street, the Dow Jones closed up 0.31 per cent on Friday, while the Nasdaq slipped 0.32 per cent, reflecting mixed sentiment.

While the long-term outlook for Indian equities remains constructive, analysts advise investors to brace for volatility in the near term due to global headwinds and ongoing consolidation trends.

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